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Pioneer launches first UK fund in bid to offer rate rise protection

Pioneer Investments has launched its first UK dedicated fund, which it says will cater for investors when bond yields and interest rates rise.

The Pioneer Sicav - Absolute Return Sterling Bond fund, an extension of Pioneer's existing absolute return bond strategy, looks to deliver capital preservation while generating positive returns in rising or falling markets. 

The fund is designed to deliver cash-like returns based on the Sterling Overnight Index Average (Sonia), which it aims to outpeform by 4%. It is co-managed by Pioneer Investments’ European fixed income and credit teams, with Tanguy Le Saout and Cosimo Marasciulo serving as lead managers.

David Hanratty, Pioneer's head of UK and Ireland distribution said in a statement: 'Rising yields and falling bond prices are becoming a reality. The real question here is the timing and the pace at which they will rise.

'We believe that investors now need to consider new approaches to fixed income investing, stepping away from traditional mandates, and considering alternative and innovate approaches.'  

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Cosimo Marasciulo
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19/23 in Bonds - Absolute Return (Performance over 3 months) Average Total Return: -0.33%
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10/10 in Bonds - Euro (Performance over 1 year) Average Total Return: 0.58%
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